Defined Contribution

In a defined contribution or "DC" plan, the amount of the contribution is defined by the plan. In other words, you "know" how much goes into the plan (or at least the formula for determining it), not the benefits that may eventually be paid out.  A defined contribution plan has individual accounts for each participant in the plan, and it can include both employer and employee contributions.  The most common DC plan is the 401(k) plan, but it may also include 403(b) and 457 plans, as well as profit-sharing and employee stock ownership plans (ESOPs). 

These contributions are invested at the direction of the employer (as in most profit-sharing plans), the employee (as in 401(k) plans), or according to the plan itself (employee stock ownership plans, or ESOPs).  The employee benefits directly from any investment gains in his or her individual account—or suffers from any investment loss.  There is no "insurance" for these benefits, as there is with defined benefit plans.

 


September 03, 2010
SEC Adopts Temporary Muni Adviser Registration

SEC Adopts Temporary Muni Adviser Registration September 3, 2010 (PLANSPONSOR.com) – The Securities and Exchange Commission (SEC) has adopted a temporary rule requiring municipal advisers to register with the SEC by October 1. PLANSPONSOR staff editors@plansponsor.com An SEC news release said
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August 31, 2010
MassMutual Participants Hang Tight in Q2

MassMutual Participants Hang Tight in Q2 August 31, 2010 (PLANSPONSOR.com) - MassMutual's Retirement Services Division has released data for the second quarter, but didn’t find much sign of movement, despite the tumultuous markets.   Nevin E. Adams editors@plansponsor.com The Sprin
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August 30, 2010
Court Dismisses BofA Stock Drop Case

Court Dismisses BofA Stock Drop Case August 30, 2010 (PLANSPONSOR.com) – A federal judge has tossed out a stock drop case against Bank of America (BofA) that had alleged numerous fiduciary breaches in connection with BofA’s Merrill Lynch and Countrywide Financial acquisitions. PLANSPONSOR staff editors@pla
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August 30, 2010
Beazer Stock Drop Pact Gets Court OK

Beazer Stock Drop Pact Gets Court OK August 30, 2010 (PLANSPONSOR.com) – A federal judge in Atlanta has given preliminary approval to a $5.5 million-settlement of a stock drop lawsuit against Beazer Homes USA. Fred Schneyer editors@plansponsor.com U.S. District Judge Richard W. Story of the U.
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